BRAZIL Law and Practice Contributed by: Fernanda Levy, Aline Bauermeister, Rodrigo Menezes and Fabiana Fagundes, FM/Derraik
Banking and Financial Regulations Participation of foreign investors in the capital of financial institutions in Brazil is subject to authorisation, pursuant to an international trea - ty providing for reciprocity, or, in the event that such investment is recognised by the Brazilian government as being in Brazil’s best interest, through the enactment of a Presidential Decree. There are no restrictions on FDI into fintechs that do not qualify as financial institutions (SCDs or SEPs). However, even for fintechs that qualify as financial institutions (credit fintechs), a Presiden - tial Decree (with a general ruling) was issued to stimulate the development of the industry in Bra - zil, establishing that foreign capital participation of up to 100% in credit fintechs is, in general, in the best interest of the government, as it favours competition and technological innovation in the industry.
It is crucial for foreign investors to consult with legal experts in the target jurisdiction, to under - stand the specific legal requirements and to ensure compliance with all applicable regula - tions. This due diligence is essential not only for legal compliance but also for assessing viability and potential investments in foreign markets.
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